business focus


Chartered accountants Haines Watts presents a series of articles based on its blogs. It offers analysis, reviews and comments and welcomes your feedback at hwca.com/blog


of the month Risks? What risks? writes Barry Potter, partner at Haines Watts


Risks are part of life and sadly it’s impossible to remove all of them when running a business – but they can be managed and reduced.


In our ‘For Love or Money’ survey*, which we conducted to understand what really motivates entrepreneurs, we uncovered some uncomfortable home truths. They included business owners’ casual attitude to risk management, which featured highly.


Most worrying of all is the fact that business owners are investing heavily in their business but at the same time relying too much on a few key stakeholders. Over two fifths (43%) confessed to having a single major customer that they couldn’t live without, while 36% admitted that


their biggest client generates nearly half their monthly revenue. But what would happen if these customers took their business away, or something else goes wrong?


Many owners spend all their time working ‘in’ their businesses and not ‘on’ them, but it’s crucial to step away and examine how the company is performing and how it has developed; it may have grown and the risks could have changed with that growth.


You need to ask the ‘what if’ questions to mitigate against the range of risks that your business might face:


• Consider your broader exposure to certain business sizes, specific sectors or different markets.


• Assess your critical activities, including key services, so you have a clear view of the areas you can’t operate without.


• Once you’ve identified the risks, analyse the likelihood and consequences of them occurring and come up with options for managing them. For example, how would your business cope if a key member of staff decided to leave or you became sick or even had to take time off suddenly to look after your family?


As a leader, it’s your responsibility to consider this; having a comprehensive business plan will make this process easier.


So, to all business owners out there, take time to look in the mirror and question your approach and your decisions. It may save your livelihood.


For further information about this or other financial matters: hwca.com


*The Haines Watts Wealth Survey is based on interviews with 514 owners of UK businesses, which are at least two years old, have a turnover of between £1 million and £50m and have between 10 and 249 employees. The study was conducted in 2016. The survey findings can be found at hwca.com/for-love-or-money


THE BUSINESS MAGAZINE – THAMES VALLEY – FEBRUARY 2017


businessmag.co.uk


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